Hawaii Real Estate Market: When Will My Home Value Return?

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Hawaii Real Estate Market: When will Home Values Return?

For a state that has a median sales price of nearly $600,000, it comes as no surprise that Hawaii has experienced its share of troubles as a result of the national housing market crisis and recession.

While other states in the Union saw home values peaking during 2007-2008, parts of Hawaii saw home sales peak much earlier. In fact, home values peaked in 2004 in Oahu. Take, for example, Honolulu, where median single-family home prices peaked at $650,000 nearly four years ago. The trough was felt in May 2009 at around $550,000, and the recent figures were $600,000 for the median single-family home price.

The Effect of the Federal Tax Credit

Did you take advantage of the federal tax credit? The federal tax credit in Hawaii also didn’t seem to have the same effect as it did in other areas of the country. However, many economists point out that real estate investors are once again entering the Hawaii real estate market.

Considering that the $8,000 tax credit was limited to individuals earning no more than $75,000 for an individual or $125,000 for a couple, the median sales price of $600,000 in Hawaii meant that purchasing a home in Hawaii and taking advantage of the tax credit just wasn’t possible for most buyers. The extension of the tax credit included income levels up to $125,000 for individuals and $225,000 for married couples, but that still didn’t seem to have a big impact on home sales in Hawaii.

In other words, even higher-income professionals would have a difficult time sneaking into the real estate market and taking advantage of the tax credit at the same time. Many economists say, however, that although the tax credit may not have helped the housing market all that much in Hawaii, it certainly didn’t hurt it.

However you look at it, Hawaii has seen steadily increasing sales since bottoming out in 2009.

Foreclosures Declining (Finally)

Foreclosures in Hawaii have finally begun to decline. In fact, according to RealtyTrac, there were 930 foreclosure filings in July, which was a 6 percent decline from the same time a year prior. This decline market the first such decline since May 2008, a consecutive string of 37 months.

Overall, home values are not expected to return to their peak levels until after 2015, although this state has shown a steady increase in both home sales and home values. If you are a homeowner, you can expect to see your home values rising consistently over the next few years.